Repayment Mortgage

Repayment Mortgage

A repayment mortgage is where throughout the term, regular payments (usually monthly) are made to partly repay interest on the capital and to partly repay the capital itself (the amount of the loan).

Initially the largest proportion of the repayments will be used to pay interest since the capital amount outstanding is at its highest value. Therefore over the initial years the capital will not reduce very much. However as the years proceed more and more of the monthly repayments will be applied to reducing the capital until towards the end of the term the large proportion will be paying off capital and a small proportion paying interest.

In the event that interest rates rise then often the monthly repayments will rise accordingly. Alternatively, to keep the same monthly repayments the term will need to be extended. If interest rates fall then the reverse applies. It is sometimes a requirement of the lender providing the mortgage that the borrower takes out life assurance so that repayment is made in the event of his/her death during the term.

Initial Rate Type Period To Provider The Overall Cost For Comparison APR LTV   5.29% Offset   First Direct 6.20% 80% More 5.29% Fixed May 2010 First Direct 6.20% 80% More 5.34% Standard May 2033 First Direct 5.50% 90% More 5.35% Discount May 2011 Vernon 7.30% 80% More 5.39% Offset   First Direct 6.20% 80% More 5.39% Adverse Apr 2010 Chelsea Building Society 7.30% 75% More 5.39% Fixed May 2013 First Direct 6.20% 80% More Powered by Defaqto THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Alternatively click on mortgage advertising links below:

Special offers

Mortgage QuotesFREE Enquiry Form